Improved Half-year Earnings Lift Equities Market to N12.7tn

It was highly rewarding for investors at the stock market last week as the market continued on its gaining streak for the third consecutive week. The market closed with a record weekly gain of N980 billion in capitalisation to be at N12.705 trillion while the Nigerian Stock Exchange (NSE) All-Share Index soared by 8.3 per cent to close at 36,864.71.

Similarly, all other indices finished higher during the week with the exception of the NSE ASeM Index that depreciated by 1.09 per cent. However, the gains recorded last week were majorly propelled by reactions to positive hall year financial results by companies. Although it was mixed grill, many of bellwether companies impressed investors with increase in theirbottom-lines for the half year ended June 30, 2017.

Daily Market Performance

The bulls remained in control when trading resumed on Monday, lifting the NSE index by 1.86 per cent to a new year high of 34,652.52. Similarly, the market capitalisation appreciated near N12 trillion mark, closing at N11.94trillion. The appreciation recorded in the share prices of Zenith Bank, Lafarge Africa, Access Bank, Dangote Cement, and UBA was mainly responsible for the gain recorded in the Index.

Investors traded 293.75 million shares worth N3.94 billion in 3,712 deals. The most actively traded sectors were: Financial Services (254.52 million shares), Conglomerates (16.51 million shares), and Consumer Goods (11.31 million shares), while the three most actively traded stocks were: Access Bank (73.56 million shares), UBA (34.61 million shares) and GTBank (32.57 million shares). In terms of sectoral performance, three sectors closed in green, while two in red. The NSE Industrial Goods Index topped gainer’s chart, appreciating 2.5 per cent due to sustained buying interest in Dangote Cement Plc and Julius Berger Nigeria. The NSE Banking index trailed, chalking up 1.1 per cent, while the NSE Oil & Gas Index ended the day 0.1 per cent higher. On the flip side, the NSE Consumer Goods Index fell 0.5 per cent due to sell-off in Nestle Nigeria Plc and PZ Cussons. In the same vein, the NSE Insurance Index shed 0.4 per cent.

The market recorded its 14th positive consecutive session, as investors remained bullish on value stocks ahead of earnings releases. Consequently, the NSE ASI advanced by 1.19 per cent to close at 35,065.47, increasing the month-to-date and year-to-date returns to 7.29 per cent and 32.22 per cent, respectively. The bourse recorded gains across all sectoral indices led by the NSE Industrial Goods Index with 2.9 per cent. NSE Banking Index and NSE Oil & Gas Index added 2.6 per cent and 1.7 per cent in that order. The NSE Insurance Index appreciated by 0.59 per cent, just as the NSE Consumer Goods Index rose by 0.12 per cent. Following a 15-day bull run, the market hit a new year high on Wednesday moved closer to a three-year high after the index rose 3.4 per cent to hit 36,740.77, while market capitalisation closed higher at N12.662 trillion. That was a 32-month high, which was last attained in November 2014.

However, Wednesday bullish performance was largely driven by appreciation in Dangote Cement (+4.9 per cent), Nigerian Breweries (+5.0 per cent) and GTBank (+5.0 per cent). All sectoral indicators closed positively in line with the bullish trend. The NSE Banking Index recorded the highest gain, rising by up 3.7 per cent due to appreciation in GTBank (+4.9 per cent) and Zenith Bank (+6.7per cent). The Consumer Goods Index trailed with a gain of 2.8 per cent on the back of gains recorded by Nigerian Breweries (+5.0 per cent) and PZ Cussons (+5.0 per cent). Also, the NSE Industrial Goods Index added 2.5 per cent higher due to a rally in Dangote Cement (+4.9 per cent), just as the NSE Oil & Gas Index chalked up 1.8 per cent. The NSE Insurance Index closed 0.4 per cent higher.

The market sustained its rally on Thursday as the index rose by 1.37per cent to close at 37,245.17, while the market capitalisation hit N12.84 trillion. The appreciation recorded in the share prices of Zenith Bank, UBA, Seplat, Nestle, and Nigerian Breweries bolstered the Thursday performance. Investors traded 542.8million shares valued at N8.01 billion in 5,939 deals on that day, up 72.5 per cent from N4.64 billion recorded the previous day. The most actively traded sectors were: Financial Services (437.04 million shares), Consumer Goods (53.59 million shares), and Conglomerates (22.90 million shares), while the three most actively traded stocks were: UBA (117.26 million shares), Zenith Bank (63.03 million shares) and Diamond Bank (52.15 million shares). However, performance across the various sectors was mixed as three of five indices closed in the green. The NSE Consumer Goods Index led with 3.8 per cent trailed by the NSE Insurance Index that added 2.2 per cent.

The bears set in on Friday on profit taking after 16 consecutive days of bull run, making the index to depreciate by 1.02 per cent to close the week at 36,864.71. Profit taking in the share prices of Dangote Cement, FBN Holdings, UBA, Access Bank, and Nigerian Breweries was mainly responsible for the decline recorded on Friday. The most actively traded sectors were: Financial Services (417.57 million shares), Conglomerates (58.39 million shares), and Consumer Goods (28.29 million shares), while the three most actively traded stocks were: FBNH (96.86 million shares), Diamond Bank (88.08 million shares) and Transcorp (57.84 million shares).

Market Turnover

Meanwhile, a total turnover of 2.211 billion shares worth N30.636 billion in 26,287 deals were traded last week by investors in contrast to a total of 3.628 billion shares valued at N34.886 billion that exchanged hands the previous week in 19,834 deals. However, the Financial Services Industry led the activity chart with 1.735 billion shares valued at N19.044 billion traded in 14,626 deals; thus contributing 78.45 per cent and 62.16 per cent to the total equity turnover volume and value respectively.

The Conglomerates Industry followed with 165.396 million shares worth N454.240 million in 1,400 deals. The third place was occupied by Consumer Goods Industry with a turnover of 135.802 million shares worth N6.681 billion in 4,143 deals. Trading in the top three equities namely – United Bank for Africa Plc, FBN Holdings Plc and Access Bank Plc, accounted for 798.334 million shares worth N7.165 billion in 5,855 deals. Also traded during the week were a total of 1.732 million units of Exchange Traded Products (ETPs) valued at N13.711 million executed in 19 deals compared with a total of 40 units valued at N493.60 transacted two weeks ago in four deals. Also, a total of 750 units of Federal Government Bonds valued at N695,229.29 were traded last week in eight deals, compared with a total of 13,465 units valued at N14.486 million transacted the previous week in 10 deals.

Conversely, Cadbury Nigeria Plc led the price losers with 18.1 per cent, followed by Morison Industries Plc with 17.5 per cent. Livestock Feeds Plc and Neimeth International Pharmaceuticals Plc shed 13.3 per cent and 13 per cent in that order. UACN Property Development Company Plc and Unity Bank Plc went down by 8.9 per cent and 8.5 per cent respectively. Other top price losers were: AIICO Insurance Plc (8.3 per cent); Red Star Express Plc (7.4 per cent); Chellarams Plc (4.9 per cent) and Cement Company of Northern Nigeria Plc (4.9 per cent).